Trading Plan for 6/27
If Friday’s close is a new trend high… then the rally will have bought itself some time. What would that say about the rally if it didn’t exploit being in such close proximity? It’s a rhetorical question.
Pattern points… (Setups and technicals)[pay]
Okay, I’ll ask it again. Since Wednesday’s rally proved that Tuesday’s drop was a one-off, was Wednesday’s rally also a stand alone effort? Here it is, after Thursday’s close, and that is still a question.
Thursday’s position squaring window didn’t rally, and that is telling. It opened at 3:37, and only extended the narrow ranging that had begun 30 minutes earlier. Whether there weren’t many shorts still stuck from earlier, or not many will to enter short at session highs, that’s not pessimism. And that’s not bullish from a contrarian perspective. So, Friday session is being entered at 1949.50 without a safety net of shorts to be squeezed.
And there’s no pressing requirement to retest the highs. The outstanding requirement for an eventual new high close can barely offset an attraction down to oversold RSIs at Thursday’s 1936.25 low. A topping market would avoid a new high close on Friday, since it entrenches the rally.
There’s also Wednesday’s consolidation under 1935.00 that had reacted up so substantially to the FOMC news. Tuesday and Thursday’s attacks came close, but neither fell far enough. Their sponsorship wouldn’t allow it. When/If it is tested eventually, it probably won’t be just to pierce it.
Meanwhile, giving early session surges a benefit of the doubt should also get a tight stop. Tuesday’s post-open rally failed, and so did Thursday’s pre-open surge. Those setups tend to start appearing left and right once there has been one or two. None of which requires reversing down from higher levels, but the upside may not be finished.
[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the morning’s bias tends to persist through the noon hour. That applies equally to no-bias, as it does to a directional bias… There is NO Strategy Session this weekend, SO be sure to ask for any pressing chart requests during regular trading hours.[/pay]
Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.